Saturday, April 16, 2011

The Bankruptcy Trustee Meeting

One of the most frightening aspects of my chapter 7 bankruptcy was the thought of attending the bankruptcy trustee meeting, officially known as the 341 Meeting Of Creditors. In retrospect, I needn't have been frightened at all.

The 341 creditors meeting is a hearing that you are required to attend between you, the bankruptcy trustee and your creditors. That's the technical definition anyway. The truth is that most of the time in chapter 7 bankruptcies,
the creditors don't even show up.

The reason for this is that creditors are often wasting both time and money to attend a creditors meeting. They know that most people who file a chapter 7 are going to be receiving a discharge no matter what. However, if they have solid grounds to object, say they can prove that you committed bankruptcy fraud, then they may very well show up. But as it was explained to me by my lawyer, it's pretty rare that they do. If a creditor can't make a bankruptcy claim, why bother?

My bankruptcy meeting of creditors went like this:

The 341 was scheduled for 2:30 in the afternoon. I arrived an hour and a half early because you just can't count on L.A. traffic to be light at any time of day, especially going into downtown. I didn't dare chance being late and having my hearing postponed.

I sat around in the waiting room for a while listening to lawyers talk and a little before 1:30, I noticed the lawyer I was supposed to meet (my lawyer sent someone else) talking to his 1:30 session people. When he was done, I introduced myself and asked him if I could go wander around. He told me to go shopping for a while, so I did some WINDOW shopping and came back about 20 minutes later. I started clocking the rate at which people were exiting the courtroom and it was averaging 4-6 minutes each. I thought that was a good sign.

The lawyer got together with me a few minutes before the 2:30 session and then all the 2:30 people went into the hearing room. He told me I was number 3 on the docket.

The trustee addressed the room and told everyone to have their driver's licenses and social security cards out so they wouldn't be fumbling for them up at the table, and warned everyone that they would be under oath. He also told everyone to turn off cell phones or anything else that would make noise and that there was to be no talking. Violators of these rules, he said, would be asked to leave and come back in a month and a half.

He called the first person and then also called my name and told me to wait against the wall. (seems debtor 2 had not shown up). Just as he was about to begin with her he had to admonish the audience because there were some people talking. Idiots. He reminded them that they could very easily be asked to leave.

The trustee spent about five minutes with debtor number one and joked with her a couple of times. Her husband was in the front row and he told her that he could see her husband shaking his head to what she was saying and told him: "it's okay sir, you are not under oath". He excused her and then it was my turn. Below is how it went:

Trustee: Please state your name.

Me: Epiphany Poo

Trustee: Please state your address:

Me: Epiphany Poo Lane, EpiphanyLand, USA

Trustee: Did you read the pamplet that you were given?

Me: Yes
Trustee: Did you read your bankruptcy petition?

Me: Yes
Trustee: Did you sign the petition yourself?

Me: Yes

Trustee: Are these your tax returns?

Me: Yes

Trustee: Is everything in your tax returns true and correct?

Me: Yes

Trustee: What is "insert name of my business"?

Me: A small part time online business.

Trustee: Are all the assets from the business listed in your petition?

Me: Yes

Trustee to lawyer: I have no further interest in these (he handed the tax returns to him).
Trustee to room: Are there any creditors here for this matter?

Room: Sweet Silence.

Trustee: You are excused. Good Luck to you.

Me: Thank you.

Then the lawyer handed me a copy of my case and my tax returns and wished me luck too. I thanked him and was on my merry way.

Whole thing took less than three minutes. Easy. And a relief. Was home at 3:12. Poured a glass of wine and had steak for dinner (it's okay, it was on sale).

My experience may not be your experience (a chapter 13 341 meeting is no doubt more complicated) but I have talked to a lot of people who filed a chapter 7 and have similar stories.

341 meetings are public, and if you like you can attend some of these ahead of time to get a feel for what they are like. And, as always, consult with your attorney, who will be able to tell you what you need to bring to the bankruptcy 341 based on your particular circumstances.

May your bankruptcy trustee meeting go as smoothly as mine did and may none of your creditors show up!